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Old 10-18-2016, 06:46 PM   #1
Tbone3636
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I'm looking at buying some property once I sell my house and then build on it. We are looking for 10-20 acres. I guess my question how does this all work? Do I just get a construction loan to buy the land and build the home then roll it into a mortgage? Or do I have to get a land loan first, then get a construction loan and then roll both together? Please educate me!


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Old 10-18-2016, 06:50 PM   #2
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I'm no help but I have the same questions. following
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Old 10-18-2016, 07:24 PM   #3
captainsling
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You can do it both ways. Just depends on your time frame for building. I would talk to a good mortgage person. StanR is a site sponsor and a great guy. Shoot him a PM
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Old 10-18-2016, 07:39 PM   #4
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I would recommend one loan to purchase the property and build the home, that way you save on closing costs. You would then have another closing to go into permanent financing.
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Old 10-18-2016, 07:41 PM   #5
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You can do it both ways. Just depends on your time frame for building. I would talk to a good mortgage person. StanR is a site sponsor and a great guy. Shoot him a PM
Thanks for the plug....

But do not have access to land or construction loans.

There are several others that will jump in that have access to other mortgage products.
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Old 10-18-2016, 07:48 PM   #6
Tbone3636
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So you can simply go to a mortgage officer and show him the property and the home you plan on building and get your mortgage?


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Old 10-18-2016, 07:55 PM   #7
captainsling
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So you can simply go to a mortgage officer and show him the property and the home you plan on building and get your mortgage?


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We used Capital Farm Credit when we bought our property and They could probably answer any questions. They deal in mostly rural property. Very reasonable costs, and you become a share holder and get yearly dividends. Our usually equalled about 2 payments a year.
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Old 10-18-2016, 08:20 PM   #8
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So you can simply go to a mortgage officer and show him the property and the home you plan on building and get your mortgage?


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I would recommend you find an independent bank in the area where you live and go discuss your plan with them.
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Old 10-18-2016, 09:50 PM   #9
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PM sent
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Old 10-19-2016, 01:55 AM   #10
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Most banks wont do a construction loan on a piece of land they dont own. They will wrap the land loan into the construction loan. THey need to be able to foreclose the land and what has been built to recoup their money. If they dont own the land, their claim comes 2nd when trying to collect.

Lots of banks will do a one time close loan. Construction turns into mortgage at the end.
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Old 10-19-2016, 03:40 AM   #11
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8mpg is right on with what I've seen, loans on just land is rough. My last land purchase was on a home equity loan, way less work and holding cash opens up better deals.
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Old 10-19-2016, 03:59 AM   #12
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Also, FYI, most banks want 25% or so down on land purchases.
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Old 10-19-2016, 05:34 AM   #13
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You can find a bank to do the land and interim but you better have Ducks in a row. Meaning plans and signed contract with builder. I just dealt with a bank that only required 10% down on land if you just go that route for now.
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Old 10-19-2016, 06:25 AM   #14
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You can find a bank to do the land and interim but you better have Ducks in a row. Meaning plans and signed contract with builder. I just dealt with a bank that only required 10% down on land if you just go that route for now.


If I'm going to sub the build out myself will it make it more difficult to get financing?


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Old 10-19-2016, 10:01 PM   #15
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If I'm going to sub the build out myself will it make it more difficult to get financing?


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Way harder. Most banks want a builder on record which cannot be you. Now, it can be your friend, father, cousin, etc that is a registered builder. Banks dont have the confidence in people to be able to contract out their own home and finish on time or on budget. You can try using a builder and pay him to be a builder on record or try an building service like Ubuildit.

If I end up building in the next year or two on my property, I will be using Ubuildit. They basically go on as the builder or record, map out the build schedule and follow the build and inspect the thing to let you know about issues.
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Old 10-19-2016, 10:28 PM   #16
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Way harder. Most banks want a builder on record which cannot be you. Now, it can be your friend, father, cousin, etc that is a registered builder. Banks dont have the confidence in people to be able to contract out their own home and finish on time or on budget. You can try using a builder and pay him to be a builder on record or try an building service like Ubuildit.

If I end up building in the next year or two on my property, I will be using Ubuildit. They basically go on as the builder or record, map out the build schedule and follow the build and inspect the thing to let you know about issues.


How much does the ubuildit program cost?


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Old 10-19-2016, 10:58 PM   #17
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You can find a bank to do the land and interim but you better have Ducks in a row. Meaning plans and signed contract with builder. I just dealt with a bank that only required 10% down on land if you just go that route for now.


Would like to know who you went through. Currently looking at a 40 acre retirement goal and need to finance.


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Old 10-20-2016, 02:24 AM   #18
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How much does the ubuildit program cost?


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Something like 5-6% if I recall. I think you can recoup the costs by having quality subs and better pricing. Unless you have a lot of good solid contacts, it could be more expensive subbing it yourself.
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Old 10-20-2016, 04:59 AM   #19
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I'm looking at buying some property once I sell my house and then build on it. We are looking for 10-20 acres. I guess my question how does this all work? Do I just get a construction loan to buy the land and build the home then roll it into a mortgage? Or do I have to get a land loan first, then get a construction loan and then roll both together? Please educate me!


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If you're a military veteran the Texas Veteran Land Board has some reasonable deals with only 5% down.
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Old 10-20-2016, 05:58 AM   #20
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we recently investigated the process earlier this year upon selling our home. you will need 25% down, and a General Contractor to carry out the work - no family GC's. Land and construction loan all wrapped up into one short term interim loan that gets rolled into a typical mortgage once the build is complete. you need to have full project design, appraisal, GC Bid estimate before you will get the interim loan.
payments go out with progress, and you pay interest on it while in construction, so make sure the builder is on top of things or you will be paying interest on a home that is being idly built - which is part of the reason they won't let the buyer be the GC, unless it is what you do for a living -then they 'MIGHT' make an exception. I do Project Engineering/Management as a profession and they would not let me be the GC.

we decided that it was too much out of pocket, and per sq.ft. for what the builder was offering us, so back to looking at already built homes.

FWIW we were going to be spending 130 sq.ft for the home itself, not including land price, garage, driveway, septic, well, electric... the builder was charging us 10% commission, 8% overhead and 10% project management fees, so think about 28-30% down the drain.

Last edited by topshot; 10-20-2016 at 06:02 AM.
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Old 10-20-2016, 07:16 AM   #21
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Call Codie. He's helping me with this right now and his banks terms beat everyone else I called. Love TBH!
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Old 10-20-2016, 07:25 AM   #22
Tbone3636
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Call Codie. He's helping me with this right now and his banks terms beat everyone else I called. Love TBH!


Will do I called yesterday but missed him


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Old 10-20-2016, 11:46 AM   #23
HunterMorgan
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Tilson Homes will put a lean on the property as long as it's worth 20%-ish of the home you plan to build. Tilson wont charge anything during construction then you get your mortgage for the land/home upon the completion of the home. Just a thought...
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Old 10-20-2016, 11:54 AM   #24
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every time you close there are closing cost so you could save some cash if you do it all at the same time.
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